How Are Stamp Duty and Registration Charges Managed?

With Zaid Finance LLP’s home financing solution, the stamp duty and registration charges are initially paid by the Special Purpose Vehicle (SPV) when the property is purchased. These costs are then added to the property’s acquisition cost, which is the price you will pay if you choose to purchase the property from the SPV at the end of the financing agreement.

How It Works:

1.When the Property Is Purchased by the SPV:
• The SPV purchases the property on your behalf and assumes ownership.
• The SPV pays the applicable stamp duty and registration charges as part of the transaction.
• These charges are added to the acquisition cost of the property.

2.When You Purchase the Property from the SPV:
• You can purchase the property from the SPV at the agreed acquisition cost (which includes the initial property price plus any stamp duty and registration costs paid by the SPV).
• At this stage, you will also pay stamp duty and registration charges to the government, as required by law, for transferring the title to your name.

Key Benefits:

• Unlike in traditional transactions where you purchase the property at the current market value, with Zaid Finance LLP, you purchase it at the original acquisition cost (property price + initial taxes paid).
• This protects you from having to pay a higher purchase price if the property’s market value appreciates over time.
• Additionally, since the title transfer occurs at the end of the agreement, you can plan your finances better for the stamp duty and registration charges.

An Example to Simplify:

• Suppose the SPV buys a property for ₹50,00,000 and pays ₹2,50,000 in stamp duty and registration charges.
• The acquisition cost becomes ₹52,50,000.
• When you decide to purchase the property, Zaid Finance LLP sells it to you for ₹52,50,000, and you pay the applicable stamp duty and registration charges again for the title transfer.

In the example above, our usual policy is to only charge you the acquisition price of ₹52,50,000, and stamp duty & registration charge will be applied on this amount. Any upside in the property in excess of what we charge, is yours to keep.

By structuring the transaction this way, you avoid the risk of market price inflation and gain clarity on costs from the beginning.